Display Advertising: the Billboards of the Web

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Display Advertising: the Billboards of the Web DDiissppllaayy AAddvveerrttiissiinngg:: TThhee BBiillllbbooaarrddss ooff tthhee WWeebb WSI White Paper Prepared by: Husam Jandal Senior Digital Marketing Consultant, WSI Display Advertising: The Billboards of the Web Introduction Display advertising is an online form of advertising similar to billboards, television ads and print ads. The ad has a simple concept and instantly provides the viewer with upfront information about the product or service. A display ad is embedded into a web page and consists of images and text. It can include sounds, animation or video to attract more attention, or with the help of some programming, can be highly interactive. HTML code is used to instruct a web server to load the specified website when the display ad is clicked on. Revenue for display advertising is usually earned on a cost per click (CPC) basis. The main aim of a display advertisement is to target traffic to the website that is publishing the ad. Like all other forms of advertising, it also aims at sales of the advertised product or services and creating brand recognition and awareness. History Display advertising has only been around for the past 15 years. The first ever display ad was sold in 1993 by Global Network Navigator (GNN), which now holds the title for the first commercial website in history. But HotWired, the world’s first commercial magazine, changed history by being the first to sell a large amount of display ads to various corporate companies. In 1994, HotWired placed the first display ad on its website. The ad was purchased by AT&T and was 468 x 60 pixels in size. It read, “Have you ever clicked your mouse right here? You will”. Since then, display advertising has come a long way. Up until 2004, display ads were measured and sold solely on the number of impressions, but today it also relies on tracking, the amount of clicks received and conversions made. Why Display Advertising? The online ad market has grown from using static JPG image banners to GIF banners and now Flash banners, which have smooth animation, exciting effects, engaging graphics and interactivity. Content and smooth animation can be shown all together in today’s animated display ads. They take less space on the web page. You can put more text content and graphics and try different looks on the same web page. Display ads also load quickly onto a web page unlike video ads. Viewers become impatient when the web page loads slowly and usually leave the page. Display ads make a page load quickly, so users can see the page content and ads without any hassle. Major portals like Yahoo!, MSN and AOL are using display ads for their own services and their clients, proving that display ads still have high popularity. Copyright © 2011 by Research and Management. All rights reserved. Page 2 of 16 Display Advertising: The Billboards of the Web Display advertising accounted for around $5 billion in online advertising spend in 2009, which is a good amount (www.emarketer.com). But search advertising on Google alone was roughly 12 billion last year. These 12 billion dollars were generated on search engine results pages that represent roughly only 5% of the Internet’s page views, which means that 5% of the Internet’s page views generates more than twice the revenue of the rest of the Internet combined. Media Consumption Social (community) 12% Surf Communication (content) (Email and IM) 42% 27% Commerce 14% Search 5% By spending less than 10% of their dollars online, businesses are missing the opportunity to reach consumers where they spend over 50% of their time! So what is the differentiating factor? Basically, targeting is the key difference between display and search advertising. Search engine marketing is one-to-one advertising where the user’s purchase intent is the primary focus. If a viewer searches for “Rayban sunglasses”, he will see ads that match this phrase. But with display advertising, advertisers broadcast their ad on a paid ad space, which is perfect for creating and promoting brand awareness. There is no campaign modification to suit the individual viewer. However, new technologies and advancements in the industry are set to give us improved targeting. Also, the introduction of real-time bidding will soon decrease the difference between display advertising and search. Real-time bidding lets advertisers bid on one impression at a time, giving the ability to pick the right impression (viewer) at the right time on the right website just like search engine marketing. The biggest advantage and most beneficial factor of display advertising is branding. Recent research by comScore confirmed that although it might be a delayed effect, a strong branding process definitely takes into effect when a viewer is exposed to a display ad, even when he or she doesn’t click on the ad. Copyright © 2011 by Research and Management. All rights reserved. Page 3 of 16 Display Advertising: The Billboards of the Web The Effects of Display Advertising The research also showed that display advertising has an effect on user behavior even at low click through rates. One hundred and thirty-nine display campaigns were monitored and the results showed that they had extensive effects on traffic, sales and branding despite a low amount of clicks. The display campaigns gave a 46% increase in websites visits and exposed viewers were 38% more likely to conduct an advertiser related branded keyword search. Twenty-seven percent were more likely to make a purchase online and 17% of viewers were more likely to make a purchase at the advertiser’s retail store. Types of Display Advertising Category Example: You are advertising a new beauty cream so you would publish your ad on websites that have a largely female audience like fashion or beauty sites. Copyright © 2011 by Research and Management. All rights reserved. Page 4 of 16 Display Advertising: The Billboards of the Web You choose to advertise in this category of websites because their visitors are your target audience and your ad is of topical interest to them. This type of advertising is best for raising brand awareness as it involves a long list of websites for your ad to be published on. Retargeting Example: You checked the Groupon website and later on, while you’re surfing online elsewhere, you see Groupon display advertisements. With retargeting in display advertising, visitors who have already been to the specified website are served the ad when they continue browsing elsewhere on the Internet. This form of advertising is more expensive and targets a smaller audience, but promises a good end result as the viewer has already established an interest in the product or service by visiting the publisher’s website before. Contextual Example: Placing display advertisements about the latest Jeep model on a car forum website. Your display ad matches the content of the web page and is of topical interest to its visitors. This type of advertising works best combined with category advertisement. Behavioral Copyright © 2011 by Research and Management. All rights reserved. Page 5 of 16 Display Advertising: The Billboards of the Web Example: If you have been visiting a list of different real estate websites in search of a new apartment, you will be served an ad for real estate listings. Behavioral display advertising targets a specific audience based on their web history with the help of cookies. This form of display advertising focuses on a smaller audience but provides more solid leads in the end. A 2010 Display Advertising Study conducted by Advertiser Perceptions Inc. shows advertisers prefer demographic and behavioral targeting. Types of Display Ads Traditional These ads are usually rectangular in shape, contain text, and have GIF or JPEG images that link to another page or site. They are the most common and popular ads seen online because they load quickly, are easy to design and modify and are easy to embed into a web page. Copyright © 2011 by Research and Management. All rights reserved. Page 6 of 16 Display Advertising: The Billboards of the Web In-line ads These ads can be seen in a column on the right or left side of a web page and can be graphical with a link, or just text with hyperlinks highlighted. Pop-up ads These ads are generated onscreen when you click a link or button on a web page. When clicked, a separate window opens over the page you are viewing. Some viewers find these ads intrusive because they have to click to remove them and return to the original page. Copyright © 2011 by Research and Management. All rights reserved. Page 7 of 16 Display Advertising: The Billboards of the Web Ads in any of these categories might be static, animated, or "rich media". A static ad does not change when you look at it - it is a single image. An animated ad uses several different images to give the appearance of motion; they are usually in GIF format. A rich media ad consists of audio or video, or involves some programming with Java to create a very interactive ad. Standard Sizes of Display Ads Publish Your Ad Online Banner ad exchange program with other websites You can exchange display ads with another website and for every 2 of their display ads seen on your website; one of yours will be displayed on their website. The biggest advantage of joining a banner exchange program is that it allows you to post your banner ads for free on different websites. The disadvantages are that you can’t control what ads are going to be on your website and you won’t be able to decide the position of your ads on their website.
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